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The Year in Review

Environment, Energy, and Resources Law: The Year in Review 2022

Environmental Transactions and Brownfields Committee Report


  • The Environmental Transactions and Brownfields Committee Report for YIR 2022.
  • Summarizes significant legal developments in 2022 in the area of environmental transactions and brownfields.
Environmental Transactions and Brownfields Committee Report
Witthaya Prasongsin via Getty Images

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Southwest Virginia: A Case Study of an Environmental Justice Region Ripe for Brownfield Solar Redevelopment

In a recent report issued by the Interagency Working Group on Coal and Power Plant Communities, Southwest Virginia was identified as the fourth most coal-dependent area in the United States, “based on the number of direct coal-related jobs as a percentage of the total number of jobs in each area.” Since its peak in 1990, coal production in the region has dropped from 46.6 million tons to just 9.9 million tons in 2020. Coal employment in the region has also dropped precipitously over the same time period, from 10,265 in 1990 to 1,878 in 2020.

This trend shows no signs of stopping. But at the same time, there are opportunities for an energy and economic transition in Southwest Virginia, due at least in part to the 2020 Virginia Clean Economy Act (VCEA), which requires electric utilities to source all of their electricity from renewable sources by 2050. Amidst the decline of thermal coal, Southwest Virginia could be a critical region for renewable energy production. “Along with its low taxes, land values and built-out broadband network, the regional transmission network was built to supply a vast network of coal mines that are now being eyed as potential sources for solar.” While the region’s mountainous terrain will not be hospitable to a plethora of massive utility-scale solar developments, which usually require flatter terrain, there is “an abundance of sites that could serve arrays of up to roughly [twenty] megawatts.” In fact, the region is home to over 100,000 acres of disturbed land that are ripe for brownfield redevelopment.

A. Virginia’s Brownfield Programs

In 2002, the Virginia General Assembly enacted the Brownfield Restoration and Land Renewal Act (the Act). The Act declared it to be “the policy of the Commonwealth to encourage remediation and restoration of brownfields by removing barriers and providing incentives and assistance whenever possible.” It also directed Virginia’s Department of Environmental Quality (DEQ) and the Virginia Economic Development Partnership to “establish policies and programs to implement these policies, including a Voluntary Remediation Program, the Brownfields Restoration and Redevelopment Fund, and other measures as may be appropriate.” The Act contained several pertinent definitions, and defined brownfield as “real property; the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.” The brownfield definition is very broad, which allows a wide variety of sites to qualify.

Virginia’s Brownfield Programs

Virginia’s Brownfield Programs

One program created by the Act, the Virginia Brownfields Restoration and Economic Redevelopment Assistance Fund (VBAF), has had tremendous impact throughout the Commonwealth. Across Virginia, over 145 Assessment and Planning Grants have been awarded under the program. These grants are available to local government entities and have been a key tool for small communities to revitalize abandoned structures such as drycleaners, printers, repair shops, and old and abandoned schools. Some typical problems on these sites include asbestos, lead based paint, solvents, and underground storage tanks. Typically, these grants are about $50,000 and are available on a rolling basis. In addition to these Assessment and Planning Grants, thirty Remediation Grants have been awarded. These Remediation Grants may be up to $500,000 and are disbursed after a competitive grant process. Virginia Code requires “a one-to-one match by the recipient of any grant made by or from the Fund.” On the map above, the blue dots represent Site Assessment and Planning Grants, and the green dots represent Site Remediation Grants.

The Act also created the Voluntary Remediation Program (VRP), which directed the Virginia Waste Management Board to promulgate regulations “to allow persons who own, operate, have a security interest in or enter into a contract for the purchase of contaminated property to voluntarily remediate releases of hazardous substances, hazardous wastes, solid wastes, or petroleum.” By focusing on sites where remediation has not clearly been mandated by the U.S. EPA, DEQ, or a court pursuant to CERCLA, RCRA, the Virginia Waste Management Act (VWMA), or the State Water Control Law, the VRP encourages hazardous substance cleanups that might not otherwise take place. Applicants are required to submit a Voluntary Remediation Report consisting of “a site characterization, a risk assessment, a remedial plan, a demonstration of completion, and documentation of public notice.” The submission of a satisfactory Voluntary Remediation Report results in a Satisfactory Completion of Remediation certification, which “constitute[s] immunity” under the VWMA, the State Water Control Law, the State Air Pollution Control Law, and any other applicable Virginia laws. The map to the right shows the location of all VRP sites in the Commonwealth. Currently, 389 sites have certificates from DEQ, and 146 sites have begun the process of completing the Voluntary Remediation Report.

In addition to these two longstanding programs, in 2021, the Virginia General Assembly enacted the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program. The Fund and Program will be administered by Virginia’s Department of Energy and provides for grants in the amount of $500 per kilowatt for renewable energy sources “located on previously coal mined lands and $100 per kilowatt … [for] renewable energy sources [] located on brownfields.” Although Virginia’s General Assembly has not appropriated any funds to this program, it is a perfect candidate for the Clean Energy Demonstration Program on Current and Former Mine Land, a competitive grant program created by the Infrastructure Investment and Jobs Act (IIJA). That program provides $500 million in grant funding through 2026 to “demonstrate the technical and economic viability of carrying out clean energy projects on current and former mine land.” The program will fund up to five clean energy projects in geographically diverse regions, and two of these projects must be solar projects.

B. Virginia’s Environmental Justice Provisions

Despite Southwest Virginia’s history as the energy capital of Virginia, it “remains one of the state’s most economically distressed regions.” While Virginia’s median household income was just north of $74,000 in 2019, “none of the coalfield localities even hit $50,000. Median household incomes ranged from as low as $29,000 in the City of Norton to just over $42,000 in Tazewell County.

These economic numbers mean that under the recently enacted Virginia Environmental Justice Act (VEJA), much of Southwest Virginia qualifies as an “environmental justice community.” Enacted in 2020, the VEJA declares that it “is the policy of the Commonwealth to promote environmental justice and ensure that it is carried out throughout the Commonwealth, with a focus on environmental justice communities and fenceline communities.”

The VEJA also contains several key definitions regarding environmental justice in the Commonwealth. The VEJA defines environmental justice as “the fair treatment and meaningful involvement of every person, regardless of race, color, national origin, income, faith, or disability, regarding the development, implementation, or enforcement of any environmental law, regulation, or policy.” The VEJA also provides some objective measurements for “environmental justice communities,” which it defines as “any low-income community or community of color.”

· “Low-income community means any census block group in which 30% or more of the population is composed of people with low income,” and “low income” is defined as

an annual household income equal to or less than the greater of (i) an amount equal to 80% of the median income of the area in which the household is located, as reported by the Department of Housing and Urban Development, and (ii) 200% of the Federal Poverty Level.

· “Community of color” is defined as

any geographically distinct area where the population of color, expressed as a percentage of the total population of such area, is higher than the population of color in the Commonwealth expressed as a percentage of the total population of the Commonwealth. However, if a community of color is composed primarily of one of the groups listed in the definition of “population of color,” the percentage population of such group in the Commonwealth shall be used instead of the percentage population of color in the Commonwealth.

The image below was taken from DEQ’s new “EJ Screen +” mapping tool and shows the Southwest Virginia region. The census block groups shaded purple are census block groups that qualify as “low-income communities” under the VEJA. Darker shades of purple indicate higher percentages of low-income residents. As is apparent from this image, almost all of the census block groups in Southwest Virginia qualify as “environmental justice communities” under Virginia law.

At the very least, the VEJA is a broad policy declaration that could be used to support existing legal causes of action. And, at least according to an advisory opinion from Mark Herring, Virginia’s former Attorney General, the VEJA “not only sets forth a policy of the Commonwealth but also imposes specific, enforceable duties on the Commonwealth to ensure that the policy is carried out.” This means that the VEJA may play a vital role in the permitting processes for polluting industries proposed to be sited in Southwest Virginia, ensuring that Southwest Virginians are fairly treated by and meaningfully involved in those processes.

In addition to the VEJA, there are some broader equity provisions within the VCEA that protect and provide opportunities for “historically economically disadvantaged communities.” Virginia Code defines “‘[h]istorically economically disadvantaged communities’ [as] (i) a community in which a majority of the population are people of color or (ii) a low-income geographic [group],” which clearly overlaps with the VEJA’s definition of “environmental justice community.”

Under the VCEA, the Virginia State Corporation Commission (SCC), the regulatory body that oversees Virginia’s electric utilities, is directed to “ensure that the development of new, or expansion of existing, energy resources or facilities does not have a disproportionate adverse impact on historically economically disadvantaged communities.” The SCC oversees the annual Renewable Portfolio Standard (RPS) dockets, in which Virginia’s two investor-owned utilities, Virginia Electric and Power Company (Dominion) and Appalachian Power Company (APCo), submit proposals for the construction or acquisition of renewable energy projects to meet the mandates of the RPS. This means that over the coming decades, as Virginia transitions to a 100% carbon free electric grid by 2050, the SCC will play a key role in ensuring that this new buildout of renewable capacity “does not have a disproportionate adverse impact on [the] historically economically disadvantaged communities” in Southwest Virginia.

In the event that Virginia’s utilities are unable to comply with the VCEA’s RPS, or if the cost of renewable energy certificates (RECs) necessary to comply with the RPS exceeds $45 per megawatt hour, the VCEA requires the utilities to make deficiency payments of $45 per megawatt-hour. These deficiency payments will be “deposited into an interest-bearing account administered by the Department of Energy." 50% of these account funds will be “directed to job training programs in historically economically disadvantaged communities” and 30% of these account funds will be “directed to renewable energy programs [] in historically economically disadvantaged communities.” These funds have the potential to create high-paying clean energy jobs in Southwest Virginia as the region transitions away from thermal coal to solar and other renewables.

C. A Sign of Times to Come: The Cumberland Forest Project

In 2019, The Nature Conservancy “(TNC) created an investment fund to purchase properties totaling 253,000 acres,” with parcels located in all three states of the Cumberland Gap area: Kentucky, Virginia, and Tennessee. The first land “acquisition was the Ataya property, 100,000 acres straddling the Kentucky-Tennessee border.” The second land acquisition “was the 153,000-acre Highlands-Lonesome Pine property in Southwest Virginia.” TNC plans to “treat the Cumberland properties a little like a fixer-upper house” by beginning to restore the forests, “implement[ing] Forest Stewardship Council-certified sustainable logging operations to generate income,” and “mak[ing] other areas available for use by local outfitters in the growing outdoor recreation industry.”

Just last year, TNC announced an “innovative collaboration with two renewable energy companies who will pursue the development of some of the first utility-scale solar projects in the Central Appalachian coalfields.” Beginning in 2020, TNC worked with the Virginia Department of Energy (formerly the Virginia Department of Mines, Minerals, and Energy) to identify “non-forested former mined lands on the Cumberland Forest property that are in proximity to existing utility lines and infrastructure, making them candidates for solar development.” Then, TNC’s team of scientists conducted additional analyses of these identified sites “to eliminate areas that possess important wildlife values, natural habitats, or other characteristics that make them incompatible with solar development.” Lastly, after a nine month request for proposals, TNC selected Sun Tribe “to be the Cumberland Forest LP’s first project developer, with Sol Systems selected to finance, own, and operate the facilities once development is complete.”

Initially, the collaboration with the developers will “center[] on Wise County in Southwest Virginia.” According to Brad Kreps, Director of TNC’s Clinch Valley Program, “the region’s former mined lands are nearly a blank canvas when it comes to building a new renewable energy economy, and with this partnership we hope to demonstrate how some of these former mining sites can be competitive for solar development in Virginia and throughout the Central Appalachian region.”

Over the next two to three years, Sun Tribe will conduct “additional field studies, pursue utility interconnection agreements, and submit local and state level permit applications on sites located within the Cumberland Forest property.” During this period, “Sun Tribe will also work with TNC, localities, the Southwest Virginia Solar Work Group, and other interested [parties] to develop a Community and Environmental Benefits Plan that will target specific investments in local workforce development, economic development, and environmental stewardship.”

More recently, TNC and Dominion announced plans to develop another utility-scale solar project, the “Highlands Solar project [that] will repurpose roughly 1,200 acres of the Former Red Onion surface mine and surrounding properties in Wise and Dickenson Counties. The [Highlands Solar] project will generate [roughly] 50 megawatts of solar energy, enough to power about 12,500 homes.” The project will also increase local tax revenue, contribute additional funds to the county through solar siting agreements, and create clean energy jobs.

“Over the next two to three years, Dominion [] will conduct additional field studies, further develop the project plans, and complete the local and state permitting processes.” ANTARES Group will serve as the project’s engineer, with construction slated to begin in 2024 or 2025.

As a utility-owned solar facility, the SCC will need to review and approve the project before operation. Pursuant to the mandates of the VCEA, the SCC’s review will ensure that the project “does not have a disproportionate adverse impact on [the] historically economically disadvantaged communities” of Southwest Virginia.

These solar developments on the coalfields of Southwest Virginia have the potential to invigorate these environmental justice communities with new jobs, new clean energy, and a renewed sense of purpose as the region transitions away from its reliance on thermal coal. Perhaps Danny Van Clief, CEO of Sun Tribe Development, put it best: “these former coal mines, which have served these communities for generations as energy assets, can continue to serve them for generations to come in a bright future.”

This chapter features a case study which serves to illustrate several major developments across environmental transactions and brownfields law, including environmental justice, brownfields redevelopment programs, and clean energy project financing. This chapter was written by Josephus Allmond, Associate Attorney at the Southern Environmental Law Center, and edited by Jacob R. Baltzegar, a second-year law student at the University of Virginia.